China's insurance authorities have authorized five domestic insurers to undertake pilot sow coverage for pig breeders to rein rising pork prices.
They are the People's Insurance Company of China, China United Property Insurance Company, Shanghai Anxin Insurance Company, Anhua Agricultural Insurance Company and Sunlight Mutual Insurance Company.
Sources with the five insurers said they were developing the new service, without revealing details. But the China Insurance Regulatory Commission (CIRC) has required the service to be available to pig breeders no later than Aug. 15.
Under CIRC guidelines, the services should start first with 118 counties registering a sale volume of more than 1 million live pigs a year and then extend to 374 countries where annual sales are up to 600,000 live pigs.
Calling the sow insurance "an opportunity" for domestic insurers to tap into the rural market, which is less insurance-aware, Dong Bo, deputy director of Property Insurance Regulatory Department of the CIRC, urged the five insurers to develop products that were "easy to understand and able to cater to the needs of farmers".
He said the insurance should cover losses from blue-ear disease and natural disasters such as floods, fires, typhoons and other epidemics.
In attempt to make an accurate evaluation of the pilot insurance program, the CIRC has required the five insurers to adopt unified rates and manage the program in a separate account.
The CIRC has priced the premium at 60 yuan per sow, promising a subsidy of 30 yuan from the central government and 18 yuan from local government. Pig breeders will only need to pay the remaining 12 yuan.
To prevent subsidy fraud, Dong said a special identify-discerning system must be put into place to ensure insurers and local governments had a good grasp of the number of sows in stock.
After the wholesale pork price jumped 74.6 percent in June from the same period last year due to short supply triggered feedstuff price hikes and outbreaks of the blue-ear pig disease, the government was pressed to facilitate pig restocking.
The highly pathogenic blue-ear disease, also known as porcine reproductive and respiratory disease, often leads to miscarriages and dead fetuses, discouraging pig breeders from raising sows.
(Xinhua News Agency August 4, 2007)